Journal of Financial Economics Vol. 87 No. 1 2008
Dominant shareholders, corporate boards, and corporate value: A cross-country analysis
Abstract
We investigate the relation between corporate value and the proportion of the board made up of independent directors in 799 firms with a dominant shareholder across 22 countries. We find a positive relation, especially in countries with weak legal protection for shareholders. The findings suggest that a dominant shareholder, were he so inclined, could offset, at least in part, the documented value discount associated with weak country-level shareholder protection by appointing an ‘independent’ board. The cost to the dominant shareholder of doing so is the loss in perquisites associated with being a dominant shareholder. Thus, not all dominant shareholders choose independent boards.
- DOI
- 10.1016/j.jfineco.2006.10.005
- Volume
- 87
- Issue
- 1
- Pages
- 73-100
- Language
- en
- Sources
- crossref bibtex:phds-export.bib openalex